TALAVERA v. METABOLIFE INTERNATIONAL

The opinion of the court was delivered by: RONALD GUZMAN, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Irene Talavera has sued Defendant Metabolife
International, Inc. ("Metabolife") and alleges in her First
Amended Complaint ("complaint") strict product liability for
design defect (Count I), strict product liability for marketing
defect (Count II), breach of warranty (Count III), negligence
(Count IV), as well as fraud and deceit (Count V). Before the
Court is Metabolife's motion to: (1) dismiss Count V pursuant to
Federal Rule of Civil Procedure ("Rule") 12(b)(6) for failure to
state a claim upon which relief may be granted because plaintiff
has not pleaded fraud with particularity as required by Rule
9(b); (2) dismiss pursuant to Rule 12(b)(6) paragraph 30 of the
complaint which seeks punitive damages; and (3) strike certain
portions of the complaint pursuant to Rule 12(f). For the reasons
set forth in this Memorandum Opinion and Order, the Court denies
the motion in its entirety.

FACTS

Plaintiff began taking Metabolife 356 E-Z Tab as directed in
December 2001. (First Am. Compl. ¶ 7.) As a result of ingesting
Metabolife 356 E-Z Tab, Plaintiff suffered a stroke on March 1,
2001, which resulted in brain damage. (Id.) Metabolife 356 E-Z Tab had been designed, manufactured and
marketed by Defendant as a dietary supplement. (Id. ¶ 8.)
Defendant represented that the product had been "independently
laboratory tested for safety." (Id.) In a nationwide
advertising campaign, Defendant represented that Metabolife 356
E-Z Tab was a convenient and scientifically and medically safe
way to lose weight and get energy. (Id. ¶ 9.)

Defendant claimed that Metabolife 356 E-Z Tab had been tested
and proven medically safe for human consumption "based on
multi-species clinical laboratory testing." (Id. ¶ 11.)
However, Defendant did not adequately test the product before
promoting use of Metabolife 356 E-Z Tab. (Id. ¶ 13.) Defendant
understated the health hazards associated with the pill and
encouraged the belief that the product had been tested for safety
and medically proven safe by several university studies. (Id. ¶
12.)

As of April 26, 2004, the Department of Justice was conducting
an investigation of Defendant for omissions and false information
provided to the Food & Drug Administration pertaining to
instances of harm suffered by Metabolife consumers. (Id. ¶ 10.)
Ephedra, an ingredient of Metabolife 356 E-Z Tab, has since been
banned in over-the-counter products. (Id. ¶ 15c, 14.) Before
founding Metabolife International, Inc., two of the founders had
previously pleaded guilty to felony charges associated with the
operation of a methamphetamine laboratory. (Id. ¶ 10.) DISCUSSION

Defendant moves to dismiss various parts of the complaint.
Defendant contends that Count V should be dismissed pursuant to
Rules 9(b) and 12(b)(6) for failure to plead fraud with
particularity and failure to state a claim upon which relief can
be granted. Defendant also moves to dismiss Paragraph 30 of the
complaint pursuant to Rule 12(b)(6) for failure to state a claim
upon which relief can be granted. Finally, Defendant moves to
strike certain paragraphs of the complaint pursuant to Rule
12(f).

I. Count V: Fraud

Normally all that is required to plead a cause of action in
federal court is a short plain statement of the claim showing
that the pleader is entitled to relief. FED.R.CIV.P. 8(a)(2). In
this case, however, Plaintiff alleges fraud. The elements of
common law fraud are: (1) a false representation of material
facts as opposed to opinion; (2) made by one who knew or believed
the representation to be untrue; (3) made to a party who had a
right to rely on the representation and, in fact, did so; (4)
made for the purpose of inducing the other party to act, or to
refrain from acting; and (5) that led to injury to the person who
relied on it. McCarthy v. PaineWebber, Inc., 618 F. Supp. 933,
941 (N.D. Ill. 1985).

When a plaintiff alleges fraud, the cause of action must be
pleaded with particularity. FED.R.CIV.P. 9(b). The purpose of the
heightened pleading requirement in fraud cases is to force the
plaintiff to do more than the usual investigation before filing
his complaint. Ackerman v. Northwestern Mut. Life Ins. Co.,
172 F.3d 467, 469 (7th Cir. 1999). The complaint must allege "the
identity of the person making the misrepresentation, the time,
place, and content of the misrepresentation, and the method by
which the misrepresentation was communicated to the plaintiff." Zaptron (HK) Ltd., v. Air Sea Transp., Inc.,
221 F.R.D. 482, 484 (7th Cir. 2004) (citing Kennedy v. Venrock
Assocs., 348 F.3d 584, 593 (7th Cir. 2003)). By requiring the
plaintiff to allege the who, what, where and when of the alleged
fraud, the rule requires the plaintiff to conduct an
investigation in sufficient depth to assure that the charge of
fraud is responsible and supported. Ackerman, 172 F.3d at 470.
The plaintiff need not identify a specific individual where the
only defendant is a corporation. Zaptron, 221 F.R.D. at 484.
The plaintiff does not have to allege the exact time the fraud
took place, and an approximate time frame will suffice.
Hernandez v. Childers, 736 F. Supp. 903, 912 (N.D. Ill. 1990).

Plaintiff clearly identifies Metabolife as the entity making
false representations. (First Am. Compl. ¶ 23.) Plaintiff alleges
that Defendant represented through promotional materials and
advertisements (¶ 21), package insert and instructions (¶ 16d),
and labeling (¶ 16e), that Metabolife 356 E-Z Tab had been
clinically and laboratory tested and medically proven safe for
consumption (¶ 22), when, in fact, these statements were false
and Defendant knew they were false (¶ 23). Plaintiff alleges the
fraudulent statements were made between December 2001 and March
2002. (Id. ¶ 22).

Contrary to Defendant's contention, Plaintiff is not required
to describe the content of the testing to prove that Defendant's
statements were fraudulent. A recognized exception to the Rule
9(b) pleading requirement for fraud may be applied where "the
plaintiff may not have access to all the facts necessary to
detail his claim." Uni*Quality, Inc. v. Infotronx, Inc.,
974 F.2d 918, 923 (7th Cir. 1992); see Corley v. Rosewood Care Ctr.,
Inc. of Peoria, 142 F.3d 1041, 1051 (7th Cir. 1998). "[W]hen
information giving rise to . . . fraud is exclusively held by
defendants, the particularity requirement of Rule 9(b) is
relaxed." U.S. Sec. Exchange Comm'n v. Santos,
292 F. Supp. 2d 1046, 1051 (N.D. Ill. 2003). Therefore, in the instant case, rather than present evidence of
testing procedures demonstrating that Defendant's representations
were false, it is sufficient for the Plaintiff to allege that
Defendant's representations concerning the safety and testing of
Metabolife 356 E-Z Tab were false. Plaintiff has alleged that as
of April 26, 2004, the Department of Justice was conducting an
investigation of Defendant for omissions and false information
provided to the Food & Drug Administration ("FDA") pertaining to
instances of harm suffered by Metabolife consumers. (First Am.
Compl. ¶ 10.) Plaintiff also alleges that Ephedra, an ingredient
of Metabolife 356 E-Z Tab, has since been banned in
over-the-counter products. (Id. ¶¶ 15c, 14.) Given that
Metabolife's purported test results regarding the safety of the
356 E-Z Tab are exclusively in Defendant's possession, and that
the FDA's investigation results are alleged to still be pending,
the exception to Rule 9(b) applies, and Plaintiff has
sufficiently pleaded fraud as required.

Further, Defendant claims that Plaintiff fails to allege that
harm resulted from her reliance on the false statements made by
Defendant. The Court disagrees. Plaintiff has pleaded that
Defendant falsely represented material facts (First Am. Compl. ¶
22), that Defendant knew those facts to be untrue (¶ 23), that
Defendant intended Plaintiff to rely on the misrepresentations to
sell a product and Plaintiff did so rely (¶¶ 24, ...

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